Funeral Trust

Funeral Expense Trust

A Funeral Expense Trust is a Single Pay Life Insurance Policy held within an irrevocable trust. This means that money can go into the trust but, cannot be withdrawn prior to the death of the insured. The value of this type of product is that funds can be withdrawn from a person’s countable assets and protected absolutely from any outside claim including:

Legal judgment or claim

Liens

Tax liability

Even Medicaid spend down requirements

This protection ensures that funds will be available for funeral expenses regardless of what adverse events may occur prior to the death of the insured. This is especially true in the event the insured is in need of nursing home care or other more advanced care which may require assets be “spent down” before Medicaid steps in. Funds deposited in an Irrevocable Funeral Expense Trust are not subject to Medicaid “look-back” provisions.

The Funeral Expense Trust policy will be issued on either a Standard Basis or a Guaranteed Issue Basis. Anyone can apply; there are no costs to setting up the trust.

Funds from the trust may be used to pay for virtually any type of funeral arrangement. There is also complete freedom to select any funeral provider.

Important To Know

Medicaid protected amounts vary by state. In most states an insured can protect up to $15,000.

In most states, the trust provides protection from inflation. Interest growth rates can be anywhere from 1%-3%. Check the inflation options in your specific state.